Dow Chemical Seeks U.S. Permit for Biggest Ethylene Plant

Dow Chemical Co. (DOW), the largest U.S.
chemical maker by sales, applied for a federal permit to build
the company’s biggest ethylene plant as cheap natural gas gives
manufacturers a cost advantage.

The plant in Freeport, Texas, would have capacity to make
1.5 million tons of ethylene a year, Nancy Lamb, a Dow
spokeswoman, said today by phone. That’s the same size as Texas
ethylene plants proposed by Chevron Phillips Chemical Co. and
Exxon Mobil Corp. (XOM) and it would be Dow’s largest in the world,
according to data compiled by Bloomberg.

Construction of the $1.7 billion plant would begin in
January 2014 with operations to begin in January 2017, Midland,
Michigan-based Dow said in an air-emissions permit application
submitted Dec. 4 to the U.S. Environmental Protection Agency.
Dow first discussed the project in April 2011 and announced the
location a year later.

Chemical makers are vying to build the first new U.S.
ethylene plants, known as crackers, since 2001. Hydraulic
fracturing, known as fracking, has increased supplies of natural
gas liquids such as ethane and propane, which are converted to
ethylene for use in plastics, antifreeze and hundreds of other
products.

Dow is investing a total of $4 billion in Texas and
Louisiana through 2017 to increase output of ethylene and
propylene. The Gulf Coast investments will boost earnings by at
least $2 billion a year after the new cracker starts, Andrew Liveris, Dow chairman and chief executive officer, said in a
Dec. 3 presentation.